Payback Method Measures

question 19

Multiple Choice

Payback method measures

• A)the frequency with which a supplier reimburses a business for increasing its purchases of merchandise
• B)how quickly a business repays bank financing
• C)speed of repayment of a small business's founders original cash investment
• D)the number of years it takes for a capital investment to pay for itself

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Definitions:

Net New Borrowings

The total amount of new debt a company takes on minus any debt repayments, indicating the net change in debt level.

Net Working Capital

The discrepancy between a firm's immediate assets and liabilities, reflecting its short-term fiscal well-being and operational effectiveness.

Depreciation

The systematic allocation of an asset's cost over its useful life to account for wear and tear, obsolescence, or decline in value.

Intangible Asset

Assets that are not physical in nature, such as patents, copyrights, trademarks, and goodwill.